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Total Articles: 28

Service Adviser Exemption Goes Back to the Supreme Court

On September 28, 2017, the U.S. Supreme Court agreed to hear a case in which the Court will be asked to decide whether the FLSA’s overtime exemption covering “any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles.” The case is Encino Motorcars v. Navarro, No. 16-1362.

Supreme Court Grants Certiorari (Again) to Address Circuit Split on FLSA Automobile Dealer Exemption

After effectively “punting” on the issue last year, the U.S. Supreme Court has again granted certiorari to resolve a circuit split regarding whether “service advisors” at automobile dealerships are exempt from receiving overtime under an exemption for “salesmen, partsmen, and mechanics” under the FLSA. Encino Motorcars, LLC v. Navarro, No. 16-1362 (U.S. Sep. 28, 2017).

Ninth Circuit Rules Service Advisors at Automotive Dealerships Are Not Exempt From Overtime Pay

xecutive Summary: On January 9, 2017, the U.S. Ninth Circuit Court of Appeals ruled in Navarro v. Encino Motorcars, for the second time, that service advisors at automotive dealerships are not exempt from overtime. In 2015, the Ninth Circuit relied on U.S. Department of Labor regulations to hold that service advisors are not exempt. In June 2016, the U.S. Supreme Court reversed that ruling, finding that the regulations were not entitled to deference, and directed the Ninth Circuit to reconsider the issue without regard to the DOL regulations.

Ninth Circuit Reaffirms Service Advisors Eligible for Overtime, Setting Up Second Potential Trip to Supreme Court

The U.S. Supreme Court in 2016 granted certiorari in Encino Motorcars, LLC v. Navarro to resolve a circuit split regarding whether “service advisors” at automobile dealerships are exempt from receiving overtime under the Fair Labor Standard Act pursuant to an exemption for any “salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles.” The federal appeals court in San Francisco, deferring to a 2011 Department of Labor regulation, had held service advisors are not covered by the exemption and, therefore, are entitled to overtime.

Groundhog Day Comes Early For West Coast Auto Dealers: Another Loss In Service Advisor Exemption Battle

In a disappointing but perhaps unsurprising decision, the 9th Circuit Court of Appeals once again ruled that service advisors employed by automobile dealerships do not qualify for the Section 13(b)(10)(A) overtime exemption under the federal Fair Labor Standards Act (FLSA). For dealers on the west coast, this might sound like a familiar story. In fact, you would be forgiven if you feel like you are reliving an early version of Groundhog Day and hearing the same story once again. You wouldn’t be far off.

What Is The Section 7(i) Exemption And Does It Apply To Auto Dealer Service Advisers?

Over the summer, the U.S. Supreme Court punted on the question of whether “Service Advisers” or “Service Writers” at auto dealerships fall within the Fair Labor Standards Act’s exemption for “any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles.” For those outside of the auto industry, these are the people who greet you when you pull into the service department and communicate with you about what work your car might need. Since the question of whether service advisers count as “salesmen” may not be definitively resolved for some time yet, many auto dealers find themselves looking for other overtime exemptions that may apply to these positions.

Overtime Exemption for Auto Dealership 'Service Advisors' Back on the Table

Auto dealership "service advisors," who are responsible for evaluating vehicles and suggesting repairs to their owners, may once again qualify for an exemption from the overtime requirements of the Fair Labor Standards Act (FLSA).

Supreme Court Rejects Deference to DOL Regulation on FLSA Exemption Due to Failure to Provide Reasoned Explanation for Change

The Supreme Court granted certiorari in Encino Motorcars, LLC v. Navarro, No. 15-415 (June 20, 2016), to resolve a circuit court split regarding whether “service advisors” are exempt from receiving overtime pay under the Fair Labor Standards Act (FLSA). Although the parties thoroughly briefed the issue, the Court did not resolve the question. Instead, as Justice Clarence Thomas noted in his dissent, the Court decided to “punt” (likely due to an inability to garner a majority opinion because of the vacancy at the Court caused by Justice Antonin Scalia’s death that has left it with just eight members since February). Automobile dealers are likely to face uncertainty a while longer.

The Supreme Court Shoots Down DOL Regulations, But Declines To Rule Whether Service Advisors are Exempt From Overtime Pay Requirements

Yesterday, the United States Supreme Court issued its long-awaited decision in the Encino Motorcars, LLC v. Navarro case, that many hoped would resolve the issue as to whether Service Advisors at auto dealerships are exempt from the overtime provisions of the Fair Labor Standards Act (FLSA).

Car Dealership’s Service Advisors’ Overtime Controversy Stalls in the Supreme Court

On June 20, 2016, the Supreme Court of the United States issued a ruling regarding the Fair Labor Standards Act’s (FLSA) overtime exemption for “any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles” at a covered dealership under section 213(b)(10)(A) of the FLSA. A 1970 U.S. Department of Labor (DOL) regulation limited this overtime exemption to salesmen (who primarily obtained orders or made sales of vehicles) and excluded service advisors (who sold service and maintenance services) from its coverage. After several courts rejected this interpretation, the DOL’s Wage and Hour Division (WHD) issued an opinion letter in 1978 and amended its Field Operations Handbook in 1987 stating that service advisors could be exempt from overtime under section 213(b)(10)(A).

Supreme Court Calls “Do Over” On FLSA Service Advisor Exemption Rule

In a 6 to 2 decision, the U.S. Supreme Court today continued the flip-flop-flip on determining whether an automobile dealership’s service advisors are exempt from the FLSA’s overtime requirements. The Court vacated and remanded the case back to the 9th Circuit Court of Appeals for further proceedings, essentially calling a “do over.” For dealerships in the 9th Circuit – those in California, Washington, Nevada, Arizona, Oregon, Alaska, Hawaii, Idaho, and Montana – this case provides a hopeful reprieve (Encino Motorcars, LLC v. Navarro et al).

Car Leasing Employee’s Equal Pay Discrimination Claim Proceeds, Federal Court Rules

A car leasing company’s manager will go to trial on her Equal Pay Act claim because the employer failed in its burden to show the manager’s gender provided “no basis” for the pay differential between her and her male counterpart, a Mississippi federal district court has ruled. White v. Checker Leasing, Inc., No. 1:14CV172-SA-DAS, 2016 U.S. Dist. LEXIS 17066 (N.D. Miss. Feb. 11, 2016).

The Supreme Court Will Decide Service Advisor's Exempt Status

Dealerships will soon get a decisive ruling from the U.S. Supreme Court about an issue that has become a thorn in the side for many dealers. The issue: whether Service Advisors are exempt from overtime requirements under Section 13(b)(10)(A) of the Fair Labor Standards Act (FLSA), which exempts “any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles, trucks, or farm implements, if he is employed by a nonmanufacturing establishment primarily engaged in the business of selling such vehicles or implements to ultimate purchasers.”

Supreme Court Agrees to Hear Service Advisor OT Pay Split

As we reported back in October 2015 a car dealership, Encino Motorcars, petitioned the Supreme Court to “restore uniformity” to the enforcement of legal precedent and hold that service advisors are exempt from the FLSA’s overtime requirements. On Friday, the Supreme Court agreed to hear the case and hopefully resolve the issue once and for all as to whether service advisors are entitled to overtime pay.

Supreme Court to Decide Whether Car Dealership 'Service Advisors' Are Exempt From Overtime

The US Supreme Court has agreed to hear a case that will determine whether auto dealership "service advisors," who are responsible for evaluating vehicles and suggesting repairs to their owners, qualify for an exemption from the overtime requirements of the Fair Labor Standards Act (FLSA).

SCOTUS to Resolve Circuit Split Regarding Whether “Service Advisors” Are Exempt From Overtime and Consider Deference Owed to USDOL

On Friday, the United States Supreme Court agreed to resolve the current split among the Circuit Courts regarding whether “service advisors” are exempt from overtime under the 213(b)(10) exemption, an exemption applicable to any “salesman, partsman, or mechanic” who is primarily engaged in “selling or servicing automobiles.”

Supreme Court to Reexamine Service Advisor Exemption

Last October, we reported on a petition by an auto dealership asking the U.S. Supreme Court to overturn a ruling by the 9th Circuit Court of Appeals holding that the dealership's service advisors did not qualify for the FLSA's exemption for any "salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles.” Last Friday, the Supreme Court granted that petition. Oral arguments in the case, Encino Motorcars, LLC v. Navarro, will likely be scheduled for Spring 2016.

Supreme Court to Resolve Circuit Split on OT Pay for Car Dealerships?

As you have read in our blog over the years, the misclassification of employees as exempt is one of the primary claims in wage and hour litigation. Misclassification claims can arise in many forms, including the classification of a certain job in a particular industry. Mortgage loan officers anyone? Today’s post is focused on the world of car dealerships – specifically the job of service advisors.

Automobile Service Advisers Are Not Exempt Under the FLSA—At Least Not According to the Ninth Circuit

Navarro v. Encino Motorcars, LLC, No. 13-55323 (March 24, 2015): The plaintiffs in Navarro v. Encino Motorcars, LLC were “service advisors” at a Mercedes Benz dealership. The main duties of service advisors are to evaluate the repair needs of customers’ vehicles and then to recommend and sell service.

9th Circuit Splits with 4th, 5th Circuits, Finds Auto Dealer Service Advisors Not Exempt Under FLSA

Reversing a district court decision, and declining to follow decisions from a number of other courts, including the Fourth and Fifth Circuits, the Ninth Circuit has deferred to the Department of Labor's (DOL) "flip-flopped" view of whether the FLSA's exemption for "any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles," applies to auto dealer service advisors/service writers.

USDOL Still Barred From Challenging "Service Writer" Exemption

Readers will recall that, in April 2011, the U.S. Labor Department declined to adopt an interpretation proposed in 2008 that would have acknowledged the federal Fair Labor Standards Act overtime-exempt status of employees doing the typical work of service writers, service advisors, etc. in automobile dealerships and truck dealerships. Prospects were that USDOL would reverse an enforcement policy of two decades' standing and would begin challenging the FLSA Section 13(b)(10)(A) overtime exemption as applied to these workers.

Appellate Court Invalidates Auto Dealership's Method Of Paying Service Technicians

In an unpublished decision, the California 2nd District Court of Appeal held that that piece-rate-paid employees are entitled to separate hourly pay for “waiting” time. The case involved a class of 108 automobile service technicians who worked for Downtown LA Motors, LP (DTLA), a Mercedes-Benz dealership. Gonzalez v. downtown LA Motors, LP.

"Service Writers" And Similar Workers: Good News/Bad News

Various news items published last Friday afternoon intimated that a part of the 2012 federal omnibus appropriations law now exempts automobile-dealership service writers and similar employees* from the federal Fair Labor Standards Act's overtime requirements. Those reports appear to have been mistaken so far as we can tell, but the spending provision does contain at least some good news in this respect.

What To Do About "Service Writers" And Similar Employees?

The federal Fair Labor Standards Act's Section 13(b)(10)(A) provides an overtime exemption for "any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles, trucks, or farm implements, if he is employed by a nonmanufacturing establishment primarily engaged in the business of selling such vehicles or implements to ultimate purchasers."

Auto Dealers: "It's Always Something!"

Just when you think you have everything under control, some new problem or challenge comes along. It is that way with many things and the law is no exception. The federal-wage hour law, called the Fair Labor Standards Act (FLSA), was passed in 1938, so you would think that in the last 70+ years, the courts and the Department of Labor have resolved every issue once and for all. Unfortunately, that is not the case.

Dealership Update: Extra Pay For A Courtesy Inspection?

A dealership recently received a demand letter from an attorney for a former technician. In the letter, the attorney threatened to sue the dealership because it had failed to pay the technician extra money to conduct "courtesy inspections." Even though the technician had earned well in excess of the minimum wage and was exempt from overtime, the attorney insisted that the dealership was legally obligated to pay the technician for the extra work performed.

Dealerships Working 24/7: Issues to Keep In Mind.

Many Toyota dealerships have announced that they will remain open 24 hours a day in order to fix the accelerator problem that has prompted the recent recall of several models. This unprecedented step is likely to raise a number of employment law issues for the affected dealerships, and may serve as a model for any other companies that may face similar issues in the future.

Dealership Update: Out of the Frying Pan, Into the Fire.

As the economy shows no immediate sign of recovery, dealers continue to look for ways to reduce their expenses. One area that they usually focus on is labor costs. Most dealers have already trimmed their workforces by not replacing employees who have left, or by out-and-out layoffs or reductions-in-force. Some dealers have also revised or restructured employee pay plans to reflect the current economy.
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